February 2004

When sponsor firms and their portfolio companies cross borders, differences of culture, language, and business and legal practice complicate the challenges in a transaction to an exponential degree. Despite the perceived challenges, many sponsors have made the decision that opportunities for superior returns beyond home borders are too promising to let pass.

The UK has always had an open and flexible lending market and a relatively unobtrusive regulatory environment for wholesale financiers. Now it also has a business community which is keen to find more efficient ways of leveraging assets to increase borrowing power. The time is ripe for asset-based financiers to assert their influence in the UK.

Insolvency and restructuring proceedings in Canada in general, and in Quebec in particular, have evolved in ways which are favorable to the asset-based lending marketplace. Given the improved outlook of the Quebec economy and other factors, asset-based lending in Quebec should be a thing less to be feared and more to be seen as an attractive growth opportunity.

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Bullish on Healthcare:

Merrill Lynch Capital’s Healthcare Finance GroupBy Carl Garrett

According to the recent figures from the Centers for Medicare and Medicaid Services, national healthcare expenditures in the U.S. totaled approximately $1.3 trillion in 2000. In January 2003, Merrill Lynch Capital formed its Healthcare Finance Group to tap this growing segment of the nation’s economy.

Both U.S. and Canadian asset-based lenders are reluctant to do business in Continental Europe because of its inconsistent legal framework and legal obstacles which are not known under U.S. or Canadian law such as title retention and “over-collateralization”. This article gives a general overview of the four types of collateral typically used in a secured lending transaction and outlines the issues involved with respect to each type of collateral.

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A Canadian Lender’s PerspectiveBy Wayne R. Ehgoetz

The market share of asset based lenders has been increasing steadily due to dips in the health of the economy both in Canada and the U.S., clearly there is an opportunity to expand the product in Canada.

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A PROFILE OF SUCCESSA Profile of Success: Finding a Niche in Retail ABFA Profile of Ward Mooney, President of Fleet Retail Group

Running the country’s leading lending firm to the retail industry requires a ‘highly collaborative management style,’ says Ward Mooney, president of Fleet Retail Group. With more than $14 billion in committed capital and clients ranging from Saks to Kmart, Mooney and his team prove that collaboration is the key to lasting success.

In Romeo and Juliet, Shakespeare (William, or is it Bill?) penned the famous lines: “What’s in a name? That which we call a rose by any other word would smell as sweet. “With great respect to the Bard, we beg to differ when it comes to secured transactions. Calling a debtor by any name other that its correct name may lead to quite an “imperfect” result for the secured creditor.

Bekins Van Lines was facing a simultaneous buyout and turnaround, with every asset at stake. In critical need of a trustworthy partner for advice, strategy and financing, Bekins made a pivotal decision to turn to the Impact Group and Textron Financial for help.

Whether managers rely on traditional measures, instinct or anecdotal information passed down by their predecessors, in the end they struggle with differentiating choices that boil down to the core notion of risk and return. In other words, how much is the bet and is the payoff big enough?

Recently, The World Bank conducted an international symposium in Warsaw, Poland that focused on the factoring industry as a key tool for small and medium enterprise (SME) development in the European Union Accession Countries. Richard Worthy of Metro Financial Services presented at the symposium and shares his experience in this article.

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